System Status Briefing

Phakamani Hadebe

Interim Group Chief Executive

3 May 2018

4 Distribution overview

5 Transmission

6 New build update

Contents

3 Generation performance

7 Conclusion

2 Operational highlights

1 Performance summary

3

Eskom’s operational performance and new build

programme delivers results

Performance summary

Eskom has maintained operational performance for the year

• Energy availability has improved to 78% for the year ending March 2018 compared to 77.3% in the previous year

During the 2017/18 financial year, the following capacity has been added to the national electricity grid:

• 2 387MW of new generation capacity, exceeding the year-end target of 1 460MW (March 2017: 1 332MW)

• 722.3km of new transmission lines, exceeding the year-end target of 677km (March 2017: 585km)

• 2 510MVA of new substation transformer capacity, exceeding the year-end target of 2 010MVA (March 2017: 2 300MVA)

We have electrified 215 519 new customers for 2017/18 compared to 207 000 in the previous year and exceeded the year end target of 201 200

Eskom continues to focus efforts on increasing electricity demand and ensuring sustainable revenue collection

Load shedding this winter is not likely, as we implement plans to manage a shift in plant performance and coal-stock levels. Eskom last load shed two and a half years ago on 14 September 2015 for 2h20min.

* Numerical data unaudited

Contents

4 Distribution overview

5 Transmission

6 New build update

3 Generation performance

7 Conclusion

2 Operational highlights

1 Performance summary

5

Operational performance

78% EAF vs. 71.1% in FY16

2 510MVA

Commissioned transformer capacity vs a

2 010MVA target for FY17/18

10,4%

Planned maintenance

vs. a 10.0% target

2 387 MW New Build capacity on the grid vs. a

1 460MW target for FY 17/18 215 519 New connections to the grid

vs. a target of 201 200

722.3km Installed transmission lines vs.

677km target in FY17/18

10.2%

Unplanned

maintenance vs. a 12%

implied target

6

Operational highlights

Description

Generation • 78% availability (EAF) end 2017/18, compared to 77.3% for the same period

last year, despite a deterioration from September 2017

• Year-end planned maintenance at 10.4% compared to target of 10%

• Unplanned maintenance at 10.2%, against a target of 12%

Highlights

Transmission

New Build

• Medupi Unit 5 & Unit 4 commercialised on 3 April and 28 November 2017 respectively, each with an installed capacity of 794MW

• Kusile Unit 1 commercialised on 30 August 2017, with an installed capacity of 799MW

• Kusile Unit 2 & Medupi Unit 3 first synchronised to the national grid on 24 March and 8 April 2018, respectively

• 722.3km transmission lines installed, exceeding target of 677km.

• 2 510MVA transformer capacity commissioned, exceeding 2 010MVA target

Distribution

Generation

• Best ever SM<1 performance of 2.09 against a target of 3.53

• Zero major incidents during 2017/18

• New electrification connections 215 519 against a target of 201 200

Contents

4 Distribution overview

5 Transmission

6 New build update

3 Generation performance

7 Conclusion

2 Operational highlights

1 Performance summary

8

Overall Generation has sustained the performance of the

previous year, despite a deterioration in performance in the

last quarter

Description

Plant

performance

• 78% Availability (EAF) at the end of 2017/2018 financial year vs 77.3%

in 2016/17

• In March 2018, UCLF increased to 16.6%, as 3 units on general

overhaul at Lethabo PS were not returned to service as planned

Maintenance

• Year-end planned maintenance was at 10.4% compared to a target of

10.0%. This is down slightly from 12.14% last year.

• UCLF was at 10.2%, improving from 10.56% for the same period last

year

Highlights

Open Cycle Gas

Turbine (OCGT)

usage

• Eskom OCGT load factor is at 0.56% for YR2017/18 compared to a

target of 1%.

• OCGT spend for YR2017/18 was R320m, down from R340m in the

previous year

Environment

• Relative particulate emissions (kg/MWh sent out) was 0,27, against a

target of 0.34

• Specific water consumption (l/kWh sent out) was 1.30 against a target

of 1.37

9

Although Generation achieved an Energy Availability

Factor of 78% for FY2018, performance has declined in

the last ~6 months

9

Generation performance for the 2018 financial year

Percentage (%)

1. April 20108 numbers are preliminary

2. Data as per official monthly stats

Per month

82.3 83.0 84.8 87.2 83.4 78.7 80.4 76.6 70.5 69.7 70.2 69.6

78.0 72.6

10.3 7.8 6.4 7.7

8.3 9.9 8.2 11.1

13.7 15.3 14.5 11.1

10.4 8.9

6.4 8.4 8.4 4.6 7.5 10.5 10.3 11.6 13.2 11.8 12.7 16.6

10.2 16.1

1.1 0.7 0.4 0.5 0.9 0.9 1.1 0.7 2.6 3.2 2.6 2.8 1.5 2.3

Key Insights

• Eskom increased

planned maintenance

during Nov to Jan

(summer months).

• Due to financial reasons,

the majority of PCLF was

phased during the latter

part of the year.

• In addition, some

outages could not be

postponed further and a

decision was made to

continue with higher

PCLF despite high UCLF

to ensure capacity is

returned in time for

winter demand increase.

• Increased breakdowns

and units in extended

cold reserve led to

reduced availability since

September 2017.

Unplanned maintenance (UCLF) Energy availability factor (EAF) Planned maintenance (PCLF) Other losses (OCLF)

10

Open cycle gas turbine (OCGT) usage increased in the last

4 months FY2017/18 as a result of reduced plant availability

OCGT performance

Insights

• Eskom has run

OCGTs to

manage the

system between

December 2017

and March 2018

• The usage of

OCGT’s from

December was

due to reduced

availability as a

result of

increased

planned

maintenance,

coal supply,

UCLF+OCLF

• OCGT load

0.56% at a total

cost of R320m

0

10

20

30

40

50

60

70

Nov-

17

2,8

Oct-17

0,5

Sep-

17

1,7

68,4

Feb-

18

15,2

Jan-18

0,0

Dec-

17

18,2

Apr-18

1,2

Jun-17

4,2

May-

17

1,1

Apr-17

1,4

Mar-18 Aug-

17

1,4

Jul-17

2,9

Load

Factor

(%)

Cost

(R’m)

OCGTs (GWh)

GWh

0.08 0.06 0.24 0.16 0.08 0.1 0.03 0.16 1.01 0.0 0.94 3.82

6 10 13 12 8 9 5 10 41 5 44 158

0.07

TBC

• Coal stockpile levels are at 35 days, excluding Medupi and Kusile

• Six of the 15 power stations are below the required target.

• Measures are in place to address the current coal shortages. The recovery plan includes securing additional coal supplies and a redirection of coal stock to address the imbalance.

• Eskom has informed NERSA of the current coal supply challenges and planned remedial actions as per regulatory requirements.

• The situation cannot be compared to 2008 when the number of stockpile days was at an average of 12 days.

• Tenders are currently being evaluated to procure 100Mt of coal for the next five years, and sufficient coal to address the short-term shortfall

Plans in place to address coal stock levels for stations below minimum stock days

12

Eskom’s maintenance planning shows that

OCGTs will be required to meet peak demand

• Prognosis from the Tetris Maintenance Plan confirms that the

system will need OCGT to meet peak demand in May 2018 and

from August until December 2018

• Eskom plans to optimise operations to reduce the use of OCGTs

13

Capacity Outlook until March 2019

20000

25000

30000

35000

40000

45000

50000

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

2018 2019

Available Capacity Gas units Operating Reserves PCLF UCLF Peak Demand Installed Capacity

UCLF

PCLF

Operating Reserve

Available Capacity

Gas

Winter UCLF

5500 MW Summer 6500 MW

Average Planned Maintenance (PCLF) 4500 MW

Contents

4 Distribution overview

5 Transmission

6 New build update

3 Generation performance

7 Conclusion

2 Operational highlights

1 Performance summary

15

Distribution exceeded targeted performance for the FY 2017/18

Customers experienced a

more reliable network

performance even in the

most challenging weather

conditions

215 519 electrification connections vs

a target of 201 200

Approximately 350 643 km of

distribution lines are

maintained

SAIFI: interruption

frequency

18.7 vs. target of 20.0

SAIDI: Interruption

duration

38.7 vs. target of 39.0

16

Distribution continues to exhibit operational excellence in sustaining network performance

Description Highlights

Smart meter

installations

Technical

Performance

• Achieved above target technical performance as measured through

System Average Interruption Duration Index (SAIDI) and System

Average Interruption Frequency Index (SAIFI)

• Maintenance index is on target and implemented in preparation for the

Winter period.

• During Winter, localised outages tend to increase due to network

overload as a result of increased illegal connections, vandalism and

equipment theft.

• Plans are in place to limit the duration of these outages

Technical

Performance

Customer

Growth/

Connections

• To increase revenue, 148 large power customers were connected -

generating sales of 1 361GWh

• A total of 26 065 small customers were connected to the network

• . Prepaid

Metering

• Exceeded the targeted installation of prepaid meters in Sandton,

Midrand and Soweto at 36 738 installations against a target of 35 500.

We are on track to deliver Universal Access

Number of

Connections

2016/17

207,436 200,000

2015/16

201,200

2017/18

215,519

158,016

194,374

Actual

Planned

• We have electrified more than 5 million

households since 1991.

• Universal access has been reached in

terms of clinics and we will continue to

connect new clinics and schools as they

are built.

• In the past two years Eskom has connected

over 200 000 customers, per year

Contents

4 Distribution overview

5 Transmission

6 New build update

3 Generation performance

7 Conclusion

2 Operational highlights

1 Performance summary

19

Transmission achieved the following highlights in FY2017/18

Description

• Approximately 9 479 GWh procured from RE IPP’s in 2017/18 in comparison with 7 227 GWh in 2016/17 (31 % increase)

System

performance

• For 2017/18 System Minute <1 is a new best ever reported performance of 2.09 against a target of 3.53

• Zero Major Incidents have occurred in 2017/18

• The number of interruptions in 2017/18 was reduced to 24 against a target of 34

Highlights

• Sustained high levels of maintenance execution with more than 99% of planned work executed

• Sustained excellent line fault performance per 100km of line, 1.86 against a target of 2.2

• Substation plant reliability and availability attained with relatively few major plant failures

Plant

Performance

RE IPP Energy

Procurement

Contents

4 Distribution overview

5 Transmission

6 New build update

3 Generation performance

7 Conclusion

2 Operational highlights

1 Performance summary

We remain focused on bringing new capacity online

P80 dates

CO = Commercial Operation

FY 2015 – FY 2017

Ingula

Unit 4

Mar-17

Jun-16

333

Ingula

Unit 1

Jul-17

Aug-16

333

Ingula

Unit 2

May-17

Aug-16

333

Ingula

Unit 3

Jan-17

Jan-17

333

Medupi

Unit 5

Mar-18

Apr-17

794

Kusile

Unit 1

Jul-18

Aug 17

799

Kusile

Unit 2

Jul-19

800

Medupi

Unit 4

Jul-18

Nov-17

794

Medupi

Unit 3

Jun-19

794

Medupi

Unit 2

Dec-19

794

Medupi

Unit 1

May-20

794

Sere Wind

Farm

Mar-15

100

Medupi

Unit 6

Aug -15

Aug-15

794

Kusile

Unit 4

Mar-21

800

Kusile

Unit 3

Aug-20

800

Kusile

Unit 5

Nov-21

800

…6 382 MW to be commissioned over the next 5

years

Kusile unit 6 (800MW) is scheduled for FY 2023

4 613 MW commissioned since 2015 &

10 750 MW commissioned since 2005 ….

FY 2018 – FY 2022

P80 schedule

Achieved CO on or

earlier than P80

Contents

4 Distribution overview

5 Transmission

6 New build update

3 Generation performance

7 Conclusion

2 Operational highlights

1 Performance summary

Conclusion

• While the risk of load shedding always exist, it is not likely to occur this winter, as we implement

plans to manage a shift in plant performance and coal-stock levels.

• We have set a target to improve plant performance and are on course to achieve plant availability

of 80% with 10% of units on planned maintenance and 10% on unplanned maintenance by

FY2018/19.

• Plans are in place to improve stockpile levels at the power stations, that are currently below

minimum stock levels.

• We continue to fast-track the build programme with 6 382 MW to be commissioned over the next 5

years

• Collection of municipal arrear debt remains a challenge, however, we continue with our

interventions and have enlisted the support of government to enhance our efforts.

• We continue to focus efforts on increasing growth in demand of electricity and ensuring sustainable

revenue collection.

• We ask customers to be vigilant of the risks of illegal electricity connections and to report cable and

electricity theft.

• Through a collaborative approach and relentless focus we are on a path to stabilise the

organisation and to achieve sustained success for Eskom.

23